ABSTRACT

 Businesses pay corporation tax on taxable business profits. nermaflage1 of businesses are able to look across the income tax, national insurance, corporation tax and other tax schemes to find the best profit extraction policies that maximise the cash they bank personally compared to the cost to the business. Shareholders receive their dividends from profits after tax so higher tax rates reduce the likely returns on equity investment and may make it tougher for small, entrepreneurial businesses to raise finance. Corporate tax is tax imposed in entities that are taxed at the entity level in a particular jurisdiction. Many systems additionally tax owners or members of those entities on dividends or other distributions by the entity to the members. Corporate income tax reduce the profitability of investments, the increase of tax rate discourages investors and lead them into investing elsewhere. The mobility of capital has given the investors an opportunity of investing in any county. So when the tax of a particular jurisdiction is high, it will make the investor to divert their fund elsewhere. This project topic centred on the effect of corporate tax on the performance of business organization which lead me into choosing two (2) firms to compare their performances with the tax they paid in order to determine the effect of tax on the performances. Multiple regression and correlation is used to analyse the performance of the firms in order to determine the effect of tax on the business. We found out the higher the tax, the lower the profitability and cash-flow of the firms and when t11e profit t and cash flow of a firm is affected, the dividends and investment of the firm will be affected also. Which means the high tax affect business performances and it is harmful to future of such business organization and also will affect the economy growth of the nation. Therefore, corporate tax should be paid in such a way it will not affect the performance of business organization in order to bring growth of the economy because low tax rate will not affect the business performance and the performances helps in boosting the business operations which will attract the investors both foreign and local investor in the organization and that will put value to a nation currency and the economy of the nation.